July 13, 2017 / 6:30 PM / a month ago

TIMELINE-Wells Fargo since sales scandal last year

8 Min Read

    July 13 (Reuters) - The scandal surrounding Wells Fargo & Co's opening of up to
2.1 million accounts in customers' names without their permission came to the fore in
September. On Sept. 8, the company announced a $185 million settlement with regulators to
atone for the sales abuses.
    The third-largest U.S. bank by assets has since encountered numerous government probes and
lawsuits. 
    In response, Wells Fargo has fired senior managers, changed pay incentives for branch
staff, separated the role of chairman and CEO and faced a difficult shareholder vote at its
annual meeting. tmsnrt.rs/2tNpLd1
    John Stumpf, the company's CEO when the scandal broke, also announced his retirement in
October, following weeks of intense public pressure. He was succeeded by Tim Sloan.
    The bank still faces probes from federal, state and local government agencies, including
the U.S. Department of Justice, as well as a number of private lawsuits, according to
regulatory filings.
    Here are the important events that took place since news of the sales scandal emerged:
    
 DATE         USN       NEWS
 Sept. 8,     reut.rs/2teQNX7  Agrees to pay $185 million in fines and $5 million in penalties to
 2016                   customers, as part of settlement with Los Angeles officials who
                        accused the bank of pushing customers into multiple, fee-generating
                        accounts that they never requested.
 Mid Sept,    reut.rs/2teLqqT  Bank's independent directors launch investigation into sales
 2016                   practices; engage law firm Shearman & Sterling LLP.    
 Sept. 19,    reut.rs/2tLsbsv  CEO John Stumpf appears before the Senate Banking Committee, comes
 2016                   under fire for his oversight. Says customers who had bogus accounts
                        opened in their names will be compensated for damage to credit rating.
                        
                        Democratic Senators Jeff Merkley and Elizabeth Warren ask him to
                        resign. Warren says Stumpf should return his salary and be criminally
                        investigated.
 Sept. 27,    reut.rs/2thWBPP  Carrie Tolstedt, head of the retail division at the center of the
 2016                   sales scandal, leaves ahead of her scheduled retirement on Dec. 31; to
                        get no severance or equity awards.    
                        Stumpf to forgo equity awards worth $41 million and salary.
 Sept. 27,    reut.rs/2teJGho  Bank eliminates product sales goals in retail division.
 2016                   
                        
 Oct. 10,     reut.rs/2teLF5h  Forms new payments, virtual solutions and innovation business group.  
 2016                   
                        Appoints new members to its operating committee, and leaders for
                        consumer lending and wholesale banking.
 Oct. 12,     reut.rs/2teVFLZ  Stumpf retires as CEO and chairman. Tim Sloan appointed CEO.
 2016                   Names Steve Sanger independent chairman and Betsy
                        Duke independent vice chair.
 Oct 14,      reut.rs/2teUbBk  Reports 3.7 percent drop in Q3 profit as it sets aside funds for
 2016                   potential legal costs.
 Nov. 29,               Amends by-laws to ensure board chairman and any vice chairman be
 2016                   independent directors.
 Jan. 10,     reut.rs/2teLIOF  Introduces new incentive compensation plan for team
 2017                   members in retail branches and call centres.
 Jan 13,      reut.rs/2teWi8g  Q4 profit falls 6.4 percent; says still analyzing whether additional
 2017                   unauthorized accounts were opened in 2009 and 2010.
 Feb 20,      reut.rs/2tillqY  Board elects two new independent directors, Karen Peetz and Ron
 2017                   Sargent.
 Feb 21,      reut.rs/2teNOOn  Terminates employment of four current and former managers in Community
 2017                   Bank division due to the sales practices. Says none will receive a
                        2016 bonus and each will forfeit all outstanding equity awards and
                        stock options.
 March 1,     reut.rs/2teBcai  Says no 2016 cash bonuses for eight senior executives, including CEO
 2017                   Sloan and CFO John Shrewsberry; reduces three-year equity awards made
                        in 2014 by up to 50 pct for the executives.
 April 13,    reut.rs/2teTTKR;  Posts nearly flat Q1 profit. Berkshire Hathaway says to sell 9 million
 2017          reut.rs/2tM1owd  shares and withdraw its application for permission to boost its
                        ownership stake above 10 percent.
 April 25,    reut.rs/2tN2c42  Shareholders rebuke the bank at the annual meeting; offer scant
 2017                   support for a dozen directors, including chairman
 May 6, 2017  reut.rs/2tMaXv9  "At Wells Fargo, there were three significant mistakes, but one dwarfs
                        all of the others ... You have to be careful what you incentivize.
                        There was an incentive system built around cross-selling ... That was
                        incentivizing the wrong kind of behavior," Warren Buffett at
                        Berkshire's 52nd annual meeting
                        "The main problem was they didn't act when they learned about it."
 May 11,      reut.rs/2tMGH3e  Doubles cost-cutting target at investor day 
 2017                   
 June 13,     reut.rs/2tMk278  Branch employees paid for the first time in May using new goals that
 2017                   focus on customer service, says branch banking chief Mary Mack at an
                        investor conference.
 June 28,     reut.rs/2tQ4wWk  Receives no objection to its 2017 capital plan from the U.S. Federal
 2017                   Reserve.
 July 13,     reut.rs/2tNjM8b  The Federal Reserve is prepared to act against the directors of Wells
 2017                   Fargo if an investigation deems it appropriate, Chair Janet Yellen
                        said while testifying before the Senate Banking Committee
 
    Source: Company filings, company presentations, Reuters 

    
 (Reporting By Aparajita Saxena in Bengaluru; Editing by Sriraj Kalluvila)
  

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